Searching for International Business Opportunities in a Risky World - BECH 2024

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Searching for International Business Opportunities in a Risky World. The BECH Index 2021-28 TARGET AUDIENCE The target audience for this whitepaper is business development executives and operational staff at B2B information technology companies considering international expansion. ABSTRACT The recent COVID-19 pandemic, Russia's invasion of Ukraine, the war between Hamas and Israel, China's increasing imperialistic ambitions, the uncertainty introduced by Trumpism in the USA and the growing acceptance of severe and man-made climate changes are changing the world. Small and medium-sized B2B information technology companies with ambitions for international expansion and global growth should carefully consider their current and future business model environment before choosing their target markets. Reflecting on these changes, I have applied a new algorithm for cal-culating the BECH Index described on page 2 4. Considering national market conditions is especially crucial when your software requires substantial localisation, your business development efforts need feet on the ground and post-sales support must be provided in the local language, in person and on short notice. The whitepaper reviews the various go-to-market approaches and urges the reader to consider the virtual and remote options that considerably reduce investment requirements and risk. When this approach is impossible, the whitepaper recommends identifying and prioritising the markets where investments in localisation and infrastructure represent the lowest possible risk. Using these criteria, Northern Europe deserves consideration. The whitepaper finally estimates the relative demand capacity for B2B information technology and related services worldwide. This estimation is called "The BECH Index." AUTHOR Hans Peter Bech, M.Sc. (econ.) ACKNOWLEDGEMENTS Data collection, tabulation and proofreading: Emma Crabtree, ecr@tbkconsult.com Design and lay-out: Jelena Galkina, info@kompot.ee 4 www.tbkconsult.com
Searching for International Business Opportunities in a Risky World. The BECH Index 2021-28 Summary I believed that the struggle for democracy, the promotion of human rights, and the pursuit of a free world had been resolved with the conclusion of the Cold War and the disintegration of the Soviet Union. I thought that globalisation, marked by the growth of trade, travel, and communication, would steadily usher in prosperity, freedom, and democracy for all. Unfortunately, I was wrong. Hopeful, but naïve. The expectation that increased international trade and communication would reduce tension and maintain peace was unfounded. As we emerged from the COVID-19 pandemic and anticipated a resurgence in global economic growth, I was confident that the climate agenda would regain its prominence on the political stage. However, the situation shifted when Russia initiated a war against Ukraine, and China's demeanour grew increasingly hostile. More recently, conflict erupted between Hamas and Israel, and the United States has yet to distance itself from the unpredictability of Trumpism decisively. Despite the atrocities and the increased uncertainty, the economy in most of the Western world has recovered nicely since COVID-19 and has been remarkably strong during the conflicts. The business climate in this area will remain friendly until we know the outcome of the US presidential election by the end of 2024. If the war in the Middle East escalates, we get a Trump version 2 situation, and China decides to annex Taiwan, then we must reconsider our international investment opportunities. How Uncertainty Affects Your Choice of Markets The degree to which you are affected by uncertainty depends on the level of investments required for market entry. If you have a product or service that customers buy or subscribe to without a need for any national infrastructure, then you take what comes. However, the more you must invest before becoming attractive and acceptable to customers, the more you should consider the local business environment. Here's my straightforward advice: Exercise caution when dealing with risky markets and focus on stable and transparent democracies instead. The benefit of such markets often lies in their ability to command higher prices, with purchase decisions driven by product features rather than personal relationships. Additionally, these markets are typically easier to initiate and are less susceptible to disruptions caused by political instability. 5 www.tbkconsult.com
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